Hoping for one state, Libyan rebels consider two

BENGHAZI, Libya — “One Libya, with Tripoli as its capital” is spray-painted on walls around this rebel city and glides off the tongues of opposition leaders. Moammar Gaddafi will fall in a week, they predict, two at the most, and they’ll build a new country then.

But as weeks stretch into months and progress on the battlefield stalls, this rebel-held area of Libya is settling into its status as a de facto separate state.

Since the February uprising that ended Gaddafi’s rule here, schools and many businesses have remained closed. But police are back on the streets, hospitals are functioning and shops are slowly reopening. Behind the scenes, opposition leaders are feverishly courting international partners as they work to set up a political and economic system for a period of division that some quietly admit may stretch on indefinitely.

A tanker arrived in the rebel-held port of Tobruk on Tuesday to load oil for export, the first time that has happened in nearly three weeks. Although it is unclear whether the rebels will be able to export enough oil to keep the east afloat economically, the tanker’s arrival marked a symbolic step in the rebels’ journey from accidental revolutionaries to governors and statesmen.

Also on Tuesday, rebel leaders for the first time welcomed to Benghazi an official U.S. envoy, who is here both to meet opposition leaders and provide assistance to the fledgling council that runs affairs in the east.

For the United States and other Western powers, the rebel efforts to build the rudiments of a nation in eastern Libya reflect the reality of a military stalemate — one in which NATO could be ensnared for months or more.

“We don’t like it, we don’t want it, but this scenario might happen,” said Fathi Baja, the rebels’ head of international affairs.

When the uprising began, “people didn’t have a slight idea of what they wanted to do, other than that they knew they wanted Gaddafi to go,” Baja said. “Now, as we start to create some political entities here and there, and we try to start some economic life and create an army, we find ourselves in another stage, and we understand that it might take a little time.”

It is no small task. During nearly 42 years of rule by Gaddafi, economic and political power was entrenched in Tripoli and civil society was virtually nonexistent. The east, which had long been resistant to Gaddafi’s rule, was badly neglected.

“The whole of Libya is living in the Middle Ages,” said opposition spokeswoman Iman Bugaighis, “but especially the east.”

Mustafa Gheriani, an opposition spokesman, said that when Gaddafi’s forces pulled out amid the uprising, “we thought it would be like Egypt — that we have ministries, we have an institution that was running. And we found that there was nothing.”

Now, the Transitional National Council — composed of 31 representatives, nominated by each of the towns in the east — is responsible for creating a political, economic and military infrastructure from scratch, a task complicated by the fact that a war is going on just a couple of hours’ drive away.

The council includes a crisis management team, which functions as a cabinet. Many of its members have lived abroad, including an economics minister who abruptly left his position as a University of Washington professor in February.

The team is learning as it goes, and putting out fires almost daily. This week, team members dealt with a spat between the rebels’ top military leaders as well as an attack on an oilfield that the rebels are counting on for revenue. They also hosted diplomats from Italy, which formally recognized the rebels on Monday, and from Great Britain, which they hope will follow. France and Qatar have already recognized the rebels as Libya’s legitimate government.

With plans to draft a constitution and electoral laws, opposition leaders are consulting with experts in the United States and Europe. The leaders say they want a democratic system, including freedom of expression, multiple political parties and an independent judiciary.

On Monday the economics minister, Ali Tarhouni, presented a $1.5 billion, four-month budget that includes salaries for soldiers and civil employees. For such a budget to be sustainable, the east will need to start selling from its ample oil fields.

Libya has long relied on oil, and the rebel government is working hard to resume exports. Qatar has agreed to market the oil, but Libya’s Central Bank and National Oil Corporation were hit with U.N. sanctions last month because of associations with Gaddafi’s family. The rebels have asked the United Nations to exempt them from the sanctions, arguing that both entities have split from Tripoli’s version, though they have retained their names in anticipation of reunification.

Until then, the proceeds will go into an escrow account and the opposition will withdraw them in the form of food, medicine and other humanitarian aid, which would not violate the sanctions, Tarhouni said.

Even if sanctions are lifted, it is unclear whether rebel-controlled oil will be sufficient to sustain this region, which is home to roughly 2 million people. Before the uprising, the country was producing 1.6 million barrels a day. Now, the rebels claim to be producing 100,000 to 130,000.

“It’s not enough,” Baja said.

Although the bulk of Libya’s oil riches lie in fields in the central or eastern parts of the country, the biggest export terminals have been trading hands in the fighting. Ports at Ras Lanuf, Brega and Es Sider are either beyond the rebels’ grasp or too heavily contested to be useful to their cause. The tanker that arrived for loading Tuesday came in at Tobruk, which is safely in rebel hands but has limited ability to export.

“They have been talking about larger volumes, but I don’t think they can do that,” said Greg Priddy, an oil analyst at the Eurasia Group.

“The bottom line is, this is a trickle. This isn’t enough to move the needle on the world oil market,” Priddy added. “But it is a substantial amount of money for the provisional government.” At today’s prices, he said, rebel leaders could earn about $100 million a month, enough to buy some basic foodstuffs.

One fact that simplifies shipments from Tobruk: The oil is likely coming from the Sarir field, which is operated by Libyans, not foreigners. That means production can proceed without outside companies.

But on Monday a facility that feeds oil to Tobruk was sabotaged, presumably by Gaddafi’s forces. The damage to production has not yet been assessed, but the attack underscored the east’s fragility. For now its leaders live in semi-hiding, with bodyguards and safe houses, and the east is dependent on NATO airstrikes to keep Gaddafi’s forces at bay.

The rebels’ plans, whether for what will be one state or two, include a more diverse economy. Until now, 96 percent of Libya’s revenue has come from oil; leaders here say they would like to add tourism, agriculture and solar energy.

“Libya will never be a superpower economically,” Tarhouni said. “It will be a small, independent state, democratic, somewhat diversified.”